Is PAEL the hidden gem your high-growth portfolio needs?

Every so often, a stock comes along that combines deep value with growth potential. Pak Elektron Limited (PAEL) might just be that stock in 2025. With a 41% upside to the target price of PKR 65/share and a forward P/E of just 9.5x—36% cheaper than peers—it’s time to take a serious look.

What’s driving the upside?

It’s not just hope. The case for PAEL is grounded in real business momentum and strategic moves:

• Power & appliances bouncing back: Demand recovery is leading to higher utilization in both the Power and Home Appliances divisions. That means more sales, more efficiency, and better margins.
• Transformers to the US? Yes, really. PAEL has started exporting transformers to the US market. That’s no small feat, and could become a steady revenue stream if execution remains solid.
• Strategic muscle from Electrolux & Panasonic: Partnerships with international brands like Electrolux and Panasonic don’t just bring brand power—they bring technology, R&D strength, and credibility in global markets.
• Margin game strong: Despite the macro challenges, PAEL’s gross margins remain impressively stable, expected at 26% in CY25. That’s better than most industrial peers.
• Inflation and rupee stabilizing: With inflation and interest rates on a downtrend, and the PKR finding its feet, PAEL gets a much-needed breather on the cost front.
• Ready to deliver: Whether it’s local megaprojects or new export orders, PAEL has the installed capacity to deliver without breaking a sweat.

What’s the catch?

Of course, no investment is risk-free. Here are the red flags to keep in mind:

• Raw material costs & utility prices: Margins can get squeezed if input costs rise or the company can’t pass them on.
• Elastic demand = pricing power issues: PAEL operates in segments where customers are price-sensitive and competition is high.
• Exports come with their own baggage: Exporting to the US sounds great, but tariffs and regulatory hoops could make it tricky.
• FX and interest rates still matter: If the rupee slides or rates reverse course, earnings could feel the pressure.

The numbers speak

Here’s a quick glance at what PAEL’s projected to deliver:

With earnings per share expected to more than triple from 2023 to 2025 and dividend resumption on the cards, this is a company turning a corner.

📢 Announcement: We're on WhatsApp – Join Us There! 

A story of value, scale, and execution

PAEL isn’t just an industrial player, it’s a story of resurgence. With a combination of undervaluation, export potential, brand partnerships, and capacity to scale, it ticks more boxes than your average mid-cap stock.

Don't miss:

• Which cars are driving the rally in auto stocks?
• 5 High ROE stocks according to Topline Securities
• Why TPLP could go higher.

So if you’re looking to add a value stock with a growth catalyst in your portfolio, it might be time to plug into PAEL.

Source: Taurus Securities Limited

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →